# 1 Trying To Think That Timing The Market Is Easy

Okay so let me make myself clear, market timing is possible. In fact, it’s one of the ways traders make money. But the fact is that it is SUPER DUPER HARD to consistently make money in this way… unless you can travel through time to accurately predict the future.

Try to talk to a professional trader out there. Instead of asking about their gains, ask about their losses and they’ll tell you VERY interesting stories on how most of the time they are right and wrong.

To time the market, you need to be well-trained. To consistently make money, you should always buy at the support and sell at the resistance. To do that, you need to be knowledgeable about technical analysis.

But if you’ll study the investing philosophy of Warren Buffett, I think that having the patience to buy stocks of wonderful profitable companies and hold them forever is much more rewarding than trying to attempt to time the market.

#2 When You Let Your Emotions Dictate Your Investment Decisions

When your emotions start to dictate your ability to make sound investing decisions, then you have a problem. The picture above (Fig. 1 ) describes what emotional investors go through on their investing journey.

When optimism and too much excitement is felt, the urge to buy stocks is felt. Investors then tend to buy stocks when they are at peak prices and thus exposes them to significant amount of risks. This is the time when investors tend to be GREEDY.

When the market corrects, FEAR sets in. Investors become desperate and panicky. Before you know, this is where investors cut their losses.

The cycle just repeats itself.

As a value investor, you should do the opposite. Instead of buying at the top, why not buy at the bottom and sell at the top. It’s very common sense actually but it’s not a common practice.

#3 Failing To Study Your Long-Term Investments Regularly

If you’re holding a 10-stock portfolio, there’s a chance that some will take the lead while others will be left behind. The result is a mediocre portfolio and you’ll be left wondering why your friend who holds a 3-stock portfolio has performed better.

Professional money managers advice that you should check your portfolio regularly. Re-balancing your portfolio by top slicing your gainers and averaging down to your losers will keep your portfolio balanced.

As long as you hold profitable undervalued companies, averaging down is the best thing that you can do. Of course, that is if you’re a value investor and the stock you’re holding is undervalued.

The most important thing to remember is to make sure that every stock you hold still makes sense to hold. If you think that one of your stocks has become overvalued, then it’s time to sell. Use the funds you raised to look for other wonderful companies to buy.

#4 Trading Too Much That Results To Paying Too Much Fees

If you constantly trade, you also constantly pay transaction and commission fees whether you win or lose. The amount may be negligible but when you pile it up, you’ll be surprised to see how huge it is.

If you trade to often, it will also greatly affect your returns.

Also take note that some mutual funds have high fees so before investing in it, make sure that the fees makes sense because even a small increase in fees can have a significant effect on wealth building over the long-term.

As a value investor, you should practice the virtue of PATIENCE. Avoid trading too much. Just let time and compounding do the work and make sure that your investments are on the right track and that’s it.

#5 Buying High And Selling Low Instead Of The Opposite

This what happens when emotions of FEAR and GREED takes a hold of you. If stocks go down, you sell. Why? It’s because you’re afraid of your portfolio losing value. Fear takes over.

If stocks go up, you buy. Why? Because you don’t want to miss out on the opportunity to maximize short-term gains. In short, you become greedy.

The fundamental principle of investing is to buy low and sell high but instead most investors do the opposite.

As a value investor, you should only focus on long-term investment goals and are not distracted of the near-term returns.

#6 Short-Term Or Long-Term: Unclear Investing Goals

These 3 things will make your investing goal crystal clear;

If these things aren’t met, then your investments will have a lesser probability of success.

Most investors invest without a concise investing goal. A year passes, two years… three years, and yet when you analyze their performance, they still remain on the same spot when they first started.

They start long. When a latest investment opportunity gives focus on maximizing short-term investment return, these long-term investors become short-term speculators.

Instead of focusing to create an investment portfolio that has a high probability of achieving their financial goals, they become too obsessed with achieving short-term results.

So what should be done?

If you decide to become a long-term investor, then you shouldn’t speculate on the short-term. It will just distract you and force you to do portfolio modifications. However, looking at the short-term factors that has a great effect on the long-term performance of your investments is what you should learn to do. So focus!

As a value investor, you should focus on having a clear investing goal to prevent yourself from straying away from the right course.

#7 Totally Unaware Of Your Investment’s Performance

Ask a bunch of newbie long-term investors the reasons why they bought the stock they own and you’ll find answers such as;

It is interesting that most investors have no idea of the performance of the investments they own and yet, they know every single features of the latest smart phone that they own.

It’s the same when it comes to stocks.

Do you want to buy a smart phone without knowing if the features will suite your needs? You don’t right? When it comes to stocks, people just buy without knowing everything about it; whether its fundamentals or technicals.

As a value investor, you have to keep track of the overall portfolio performance and compare it to inflation. This is one of the simplest way to determine if your investments are performing mediocre or above average.

#8 Not Being Able To Diversify

Warren Buffett isn’t a fan of diversification as stated in one of his quotes.

Diversification is protection against ignorance. It makes little sense if you know what you are doing.

But according to him, if you don’t know what you’re doing, then diversification is required.

Wide diversification is only required when investors do not understand what they are doing.

Professional investors believe that the only way to provide appropriate levels of risk and return in various market scenarios is to create a well diversified portfolio of stocks and fixed-income securities.

Diversification should be a balanced thing. Too little and you become largely exposed in one security. If it goes south, then you lose. Too much on the other hand will give you mediocre performance.

As a value investor using diversification to minimize risk, you should find the right balance. Not too much and not too little but still making sure that it can give you above average returns.

How To Avoid These Common Investing Mistakes

To avoid these investing mistakes, one advice I could give is to study the markets and the investing principles of the greatest investors who have been there and done that. As an example, Ben Graham and Warren Buffett.

By learning their ways, you slowly become to think like them and you learn how to invest like them.

But if studying the markets by yourself puts a lot of work for you, then look for a stocks recommendation provider that has the ability to solve your problems about investing in general.

It should have long history of good track record to gain your trust.

Finding these kind of services is not hard anymore because the Internet has made it possible to search these services easier than before.

Luckily for you, here’s one service I use and I believe that can ultimately solve all these common investing mistakes. Take a look at PinoyInvestor.

How PinoyInvestor Can Help You Solve These Investing Mistakes?

PinoyInvestor solves all the mistakes I mentioned above. You don’t believe do you? Well, first let me show you some proof.

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